Core ideas:
Belt and Road Initiative resource integrator: develop the park to create a new city. Major shareholders, Qingdao City Investment and other well-funded parties provide financing services as owners of industrial parks or new towns, CDB and other institutions. Listed companies are engineering contractors in the early stage, operators after the completion of the park, and injected into listed companies after profits. Listed companies benefit from the three stages of industrial park construction, operation and maturity. This model carries on the excess capacity of domestic equipment, infrastructure and other industries, foreign backward infrastructure, rich natural resources, and realizes the optimal allocation of resources. Provide the whole industry chain service for the enterprises entering the park to avoid all kinds of disobedience; the park is the special zone of the opposite country, and it is also China's overseas special zone for the enterprises entering the park. By going out to sea in groups, enterprises entering the park will have a stronger say and enjoy more favorable policy dividends.
Indonesia Sulawesi Industrial Park project is the company's first sea park project. The owner of the industrial park is a listed company, and the owner of the enterprise entering the park is the major shareholder and other institutional investors. as a general contractor, the company enjoys the export income of complete sets of equipment brought by the general contractor in the early stage. after the production capacity is put into production, it enjoys the sales income of laterite nickel ore and coal and the operation income of the industrial park, and the high probability is injected into the listed company when the operation of the enterprise in the park is mature. Launched in February 2014, the first phase of land expropriation of 400 hectares, with a total investment of 400 million US dollars, including 20 sets of blast furnaces, 12 waste heat power stations 40-500000 tons of nickel and iron. The amount of investment in the second phase is expected to be higher and the production capacity is greater. The general contract of the project is expected to contribute more than US $800 million to the company's income. after the production capacity is fully put into production, only the revenue of the original ore (laterite nickel ore and coal) is expected to exceed US $250 million, and the sales of nickel and iron into the park are expected to exceed 10 billion yuan.
The Sulawesi Industrial Park in Indonesia marks the recognition of the company's new Belt and Road Initiative model. The company signed a Memorandum of understanding on the Zimbabwe Special Economic Zone and Industrial Park Project with the China Railway second Hospital, Qingdao City Investment, the Ministry of Industry and Commerce of the Republic of Zimbabwe, the China Development Bank and the people's Government of Qingdao. The scope of cooperation includes the establishment of special economic zones and industrial parks in Zimbabwe Wangji (national energy base), Bulawayo (industrial base), Harare (capital) economic zone. The company's ability to integrate resources in the field of Belt and Road Initiative, please climb another high-rise building. In 2015 alone, EPC business has signed contracts of nearly 700 million US dollars, and the six-party agreement basically determines that the company's performance will bring sustained high growth in the next 3-4 years.
It is estimated that the company's net profit from 2015 to 2017 is 3.15,5.23 and 947 million yuan respectively, with a valuation of 16.3 billion yuan with reference to the price-to-earnings ratio of companies with similar market capitalization in the same industry. Considering the company's acquisition of excellent resources at low prices of coal and nickel iron and the premium in the secondary market, the acquisition price is 1.5 times the premium, and the resources are valued at 2.865 billion yuan. The company is valued at 19.1 billion yuan, corresponding to the share price of 24.9 yuan, covering for the first time and given a "recommended" rating.
Investment Summary:
Drivers, key assumptions and key predictions:
The uniqueness and practicality of the company's business model are gradually understood and accepted by the market; orders continue to be released; as the state encourages industries with overcapacity to export, the tax rebate policy continues, the company's complete sets of equipment export business maintains a high gross margin (more than 40%).
Our view is different from that of the market:
The company is in the initial stage of successful transformation, the market attention is low, and is usually regarded by the market as an ordinary overseas project contracting company. We believe that the company's business model is highly creative and scarce, integrates a variety of resources at home and abroad, and integrates multiple business models such as overseas project contracting, overseas park planning and operation, overseas direct investment, and so on. To overcome the barriers to overseas investment of Chinese enterprises, it is possible to replicate the speed of Chinese construction overseas. For the listed company itself, its profitability has strong sustainability and high growth, so it should be given a high valuation.
Valuation and investment advice:
It is estimated that the company's net profit from 2015 to 2017 is 3.15,5.23 and 947 million yuan respectively, with a valuation of 16.3 billion yuan with reference to the price-to-earnings ratio of companies with similar market capitalization in the same industry. Considering the company's acquisition of excellent resources at low prices of coal and nickel iron and the premium in the secondary market, the acquisition price is 1.5 times the premium, and the resources are valued at 2.865 billion yuan. The total valuation of the company is 19.1 billion yuan.
Catalyst for stock price performance:
The business model is becoming more and more mature and gradually accepted by the market; orders continue to be released.
Main risk factors:
The political risk of overseas investment, the change of China's import and export policy, and the stability of the counterparty policy.